Government unveils plan to double tea farmers' earnings by 2027

Appearing before the National Assembly on Wednesday, Agriculture Cabinet Secretary (CS) Mutahi Kagwe intimated that tea farmers receive payments through a two-tier payment model; a monthly initial payment and an annual second payment (bonus).

Currently, farmers receive between Ksh.23 and Ksh.25 per kilogramme as initial payment, while the bonus depends on auction prices, exchange rates and cost of production.

The CS further revealed that the reforms will also aid in reviewing the tea bonus payment model to allow farmers to receive bonuses every quarter instead of annually, to ease liquidity challenges.

“These reforms are meant to ensure fair, transparent and uniform earnings for all tea farmers across the country, regardless of region,” said CS Kagwe.

Some of the rolled-out interventions include the modernisation of factories through a Ksh.3.7 billion concessional loan facility, the implementation of mandatory greenleaf quality standards, the establishment of a tea quality laboratory in Mombasa, and the onboarding of a Strategic Tea Quality Improvement Programme (STQIP).

Other reforms include removing the reserve price to restore market demand, a crackdown on greenleaf hawking and theft, installing governance and financial audits of struggling factories, expanding into digital tea marketing platforms, establishing aggressive international market diplomacy under AfCFTA, and introducing the Tea Levy Regulations, 2024, to sustainably fund the industry.

During the 2024/25 financial year, average auction prices dropped to USD 2.41 (Ksh.311.81) per kilogramme of made tea from USD 2.54 (Ksh.328.63), largely due to forex shortages in Pakistan and Egypt, conflict in Sudan, and market access challenges in Iran, which collectively account for about 70% of Kenya’s tea exports.

The Ministry also recorded regional disparities, with East of Rift factories averaging USD 2.95 (Ksh.381.67), while West of Rift factories recorded only USD 1.78 (Ksh.230.30) per kilogramme due to lower quality teas.

Consequently, farmers in the East earned an average of Ksh.69 per kg of green leaf, while those in the West received only Ksh.38, compared to the national average of Ksh.56.

Production costs also rose sharply to Ksh.112.96 per kilogramme of made tea, with West of Rift factories recording higher costs at Ksh.134.34 due to governance gaps, over-employment and inefficiencies.

The sector has been marred with concerns of unfair tea prices and low bonuses after several MPs from tea-growing areas petitioned the National Assembly Speaker over the matter.

Stakeholders have complained that tea prices from the East of the Rift Valley are generally higher than those from the West, leading to inefficiencies in low returns for tea farmers.

East of the Rift includes tea-growing zones in counties such as Murang’a, Kiambu, Embu, Kirinyaga, Nyeri, and Tharaka Nithi, while the West covers Kericho, Bomet, Nandi, Bungoma, and Trans Nzoia.

The National Assembly Committee on Agriculture and Livestock had been tasked to probe the matter and table a report to the House.